If you employ “award-free” employees – that is, employees who are not covered by a modern award – you should consider reviewing your employment arrangements in light of a recent change to the Miscellaneous Award. While the Miscellaneous Award has previously been inconsequential for most employers, the recent change could have costly consequences for employers if ignored.
What has changed?
From 1 July 2020, the Miscellaneous Award applies to low-skilled and trade-qualified employees who are not covered by another modern award.
This is a significant change. Prior to 1 July 2020, the Miscellaneous Award did not apply to employees who worked in an industry covered by a modern award, but did not fall into a classification within that industry’s modern award. For example, take a security guard employed by a construction company to watch over a worksite after hours. The security guard works in an industry covered by a modern award (construction), but does not fall into a classification within the construction industry’s modern award. Despite performing the kind of work which would generally receive the benefit of award entitlements, the security guard would not have been covered by the Miscellaneous Award.
However, as a result of the change, the same security guard working for the same company would be covered by the Miscellaneous Award.
How will this change impact my business?
The change means that your award-free employees may now be covered by the Miscellaneous Award. If this is the case, you may be required to comply with award specific conditions such as:
minimum rates of pay;
hours of work, breaks and overtime;
requirements for ending employment.
There are serious consequences for failing to comply with such conditions. Employers can be exposed to underpayment claims if they have not paid employees their award entitlements.
In a recent case, an equipment hire company was required to pay compensation for unfairly dismissing one of its employees. The company had failed to comply with the pre-termination consultation requirements under the Miscellaneous Award before terminating the employee. The employer mistakenly believed the employee was award-free, when in actual fact, the employee was covered by the Miscellaneous Award.
What should I be doing now?
You should review your workforce and consider whether your award free employees are truly “award free”. If you have any doubts about your obligations, do not hesitate to contact our employment law team for advice.